YOTAI REFRACTORIES CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥13.96B
• Operating Income: ¥1.33B
• Net Income: ¥1.17B
• EPS: ¥41.65

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

For FY2026 Q2 (consolidated, JGAAP), 株式会社ヨータイ posted revenue of ¥13,957 million (-3.6% YoY), operating income of ¥1,327 million (-16.3% YoY), and net income of ¥764 million (-34.9% YoY), indicating a noticeable profit compression despite only a modest top-line decline. Gross profit was ¥2,958.8 million, implying a gross margin of 21.2%, while the operating margin stood at 9.5%, evidencing margin pressure in the period. Ordinary income of ¥1,404 million exceeded operating income, supported by negligible interest expense (¥0.099 million) and non-operating balance, but net income fell due in part to a sizable tax burden. Based on net income and tax expense of ¥492.7 million, the implied effective tax rate is approximately 39–40%, which aligns with domestic statutory ranges; the provided “0.0%” effective tax rate metric appears non-representative given disclosed tax expense. DuPont metrics show a net profit margin of 5.47%, asset turnover of 0.340x, and financial leverage of 1.23x, yielding ROE of 2.30%, indicating subdued shareholder returns in the period. Balance sheet strength is notable: total assets are ¥41,055 million, equity is ¥33,251 million, and liabilities are ¥8,430 million, implying an equity ratio of roughly 81% despite the reported 0.0% figure. Liquidity is very strong, with current assets of ¥29,584 million against current liabilities of ¥6,708 million (current ratio 441%), and working capital of ¥22,876 million. Cash generation looks solid with operating cash flow of ¥1,533 million and OCF/Net Income of 2.01x, suggesting earnings quality was good in this half. EBITDA was ¥1,973 million (14.1% margin), with D&A of ¥646 million, indicating meaningful capital intensity but strong interest coverage (13,404x) due to minimal debt service needs. Financing cash outflow of ¥841 million suggests shareholder returns or debt repayments, though DPS is reported as ¥0 and payout ratio 0%; disclosures are likely incomplete on dividends and investing cash flows. The company’s leverage is modest (D/E 0.25x) and solvency risk appears low, cushioning cyclical swings in end markets. Profitability weakened YoY, likely reflecting softer volumes or pricing and cost headwinds, but the firm preserved double-digit EBITDA margin. Given the nature of refractories demand tied to steel and industrial production, near-term visibility likely hinges on order trends in domestic steel and other heavy industries, input cost dynamics (raw materials and energy), and pricing discipline. Overall, the period shows resilient cash generation and a fortress balance sheet offsetting margin compression and lower ROE. Data gaps (e.g., inventories, investing cash flows, cash balance, shares outstanding) limit precision on certain ratios and dividend capacity analysis, but the available non-zero data points indicate fundamentally sound financial health with transitory profitability pressure.

Profitability Analysis

ROE_decomposition: ROE 2.30% = Net Profit Margin 5.47% × Asset Turnover 0.340 × Financial Leverage 1.23. The low ROE is primarily driven by modest net margin and slow asset turnover; leverage is low and thus not a material enhancer. margin_quality: Gross margin 21.2% and operating margin ~9.5% (¥1,327m/¥13,957m) indicate compression vs. prior year (OP down 16.3% on revenue down 3.6%), implying negative operating leverage and/or cost inflation. Ordinary margin ~10.1% (¥1,404m/¥13,957m) benefits from minimal interest expense. Implied effective tax rate ~39–40% (¥492.7m tax / ~¥1,256.7m pre-tax) weighs on net margin 5.47%. operating_leverage: Operating income declined faster than revenue (-16.3% vs. -3.6%), indicating negative operating leverage in the period. EBITDA margin of 14.1% vs. operating margin 9.5% shows a ~4.6pt D&A drag consistent with capital-intensive assets; fixed cost absorption likely pressured margins as volumes eased.

Growth Assessment

revenue_sustainability: Revenue contracted 3.6% YoY to ¥13,957m, suggesting softer demand in core end-markets (e.g., steel/industrial) or pricing normalization. With asset turnover at 0.340x, growth remains volume- and utilization-sensitive. profit_quality: OP fell 16.3% YoY and NI fell 34.9% YoY, pointing to margin compression and a heavier tax burden. Nonetheless, OCF/NI of 2.01x indicates earnings were well backed by cash generation in this half. outlook: Short-term outlook depends on order recovery in steel and heavy industries, stabilization of energy and refractory raw material costs, and pricing discipline. Maintaining EBITDA margins near low-to-mid teens will be key to offset low asset turnover and support ROE.

Financial Health

liquidity: Current assets ¥29,584m vs. current liabilities ¥6,708m yields a current ratio of 441% and sizeable working capital of ¥22,876m. Quick ratio is shown as 441% due to undisclosed inventories; absolute liquidity appears very strong based on available data. solvency: Total equity ¥33,251m vs. total liabilities ¥8,430m; implied equity ratio ~81% (despite the reported 0.0%). Debt-to-equity is 0.25x and interest coverage is ~13,404x, indicating very low financial risk. capital_structure: Financial leverage of 1.23x (Assets/Equity) is conservative. Minimal interest expense (¥0.099m) suggests limited reliance on debt; balance sheet capacity is ample for cyclical downturns or selective investment.

Cash Flow Quality

earnings_quality: OCF of ¥1,533m vs. NI of ¥764m gives OCF/NI of 2.01x, indicating robust cash conversion and limited accrual risk in the period. FCF_analysis: Investing cash flow is undisclosed (reported as 0). Consequently, free cash flow cannot be reliably calculated; the provided FCF of 0 should be treated as not available rather than actual zero. working_capital: High working capital (¥22,876m) and strong current assets underpin liquidity. Without inventory disclosure, the mix of receivables/inventory/cash effects on OCF is unclear, but positive OCF suggests manageable working capital movements this half.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are reported as 0.00, which may reflect non-disclosure rather than an actual zero. Given NI of ¥764m and strong OCF, capacity for distributions exists, but policy details are not provided. FCF_coverage: FCF is reported as 0 due to missing investing cash flows; hence coverage analysis cannot be performed. OCF of ¥1,533m and low financing costs suggest potential coverage could be adequate if capex is moderate. policy_outlook: With a conservative balance sheet and solid OCF, the company has flexibility. However, absent explicit dividend guidance and investing cash flow, we cannot infer the sustainability or trajectory of dividends.

Risk Assessment

Business Risks:

• Cyclical demand from steel and heavy industries affecting refractory volumes and pricing
• Raw material cost volatility (e.g., alumina, magnesia) and energy price fluctuations
• Competitive pressure and pricing discipline in commoditized product lines
• Supply chain and import dependency risks, including FX impacts on raw materials
• Customer concentration in core industrial segments
• Environmental and regulatory requirements impacting production processes

Financial Risks:

• Margin compression under volume declines due to fixed cost base (operating leverage)
• Potential tax rate volatility affecting net margins
• Working capital swings tied to order cycles and input cost movements
• Data gaps on cash and investing flows limiting visibility on FCF and capital needs

Key Concerns:

• Negative operating leverage as evidenced by OP decline outpacing revenue
• Low ROE (2.30%) driven by modest margins and slow asset turnover
• Incomplete disclosures (inventories, investing CF, cash balance, shares) complicate detailed ratio analysis

Investment Implications

Key Takeaways:

• Resilient cash generation (OCF/NI 2.01x) despite earnings pressure
• Strong balance sheet with implied ~81% equity ratio and minimal interest burden
• Margin compression and negative operating leverage weighed on ROE to 2.30%
• Liquidity ample (current ratio 441%) offering cyclical downside protection
• Visibility on FCF and dividend capacity constrained by missing investing CF and DPS disclosure

Metrics to Watch:

• Order trends and backlog in steel/industrial customers
• Gross and operating margin trajectory vs. energy/raw material costs
• Capex and investing cash flows to gauge true FCF
• Working capital turns (receivables and inventory days) once disclosed
• Tax rate normalization and its impact on net margin
• Asset turnover improvements from utilization or product mix

Relative Positioning: Financially conservative with strong liquidity and low leverage relative to typical capital-intensive peers, but current profitability and ROE are subdued due to margin pressure and low asset turnover.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis